Fewer kids of single unwed parents receive maximum government co-matching benefits: MSF

SINGAPORE –  A wide gap has surfaced in how Singaporean parents tap a government co-savings scheme for their children’s development, with single unwed parents significantly less likely to maximise the benefits than married couples.

As of Sept 2, only about 30 per cent of children of single unwed parents had reached the maximum Child Development Account (CDA) co-matching grant limit, compared to about 70 per cent of children from married households, said the Ministry of Social and Family Development (MSF).

This suggests that single unwed parents are facing greater hurdles in making the voluntary deposits required to receive the full government co-funding for their children, despite equal access to the scheme. 

The CDA can be used only to support the children’s education and healthcare needs. Each account has an initial $5,000 grant. For every dollar that is deposited into it – which could be by parents, relatives or donors – the Government will co-match up to a cap.

Current caps range between $4,000 for the first child and $15,000 for the fifth child. From Oct 1, 2027, these caps will be standardised to $5,000 regardless of birth order, as part of new measures for marriage and parenthood announced during the National Day Rally.

MSF gave the statistics showing the wide disparity between children of the two groups of parents in a parliamentary reply on Sept 10, in response to a question raised by MP Gabriel Lam (Sembawang GRC).

The statistics were based on data for children born between Sept 1, 2016 and Dec 31, 2020. These children are now at least six years old – by which the CDA co-matching grant “would have been fully utilised in most instances”, said the ministry.

“We recognise that lower-income families, including some single-income families, may face greater difficulty saving to benefit from the co-matching structure,” it added.

Children of unwed parents started qualifying for the scheme only from September 2016. Previously, it was only available to children with married parents.

Between 2020 and 2024, an average of about 745 babies a year were born here to Singaporean mothers who were not married to the baby’s father at the time of birth. 

Jennifer Heng, director of Safe Place, a charity helping pregnant women in distress, said single parents often find it hard to set aside money for savings given their financial pressures.

The burden of paying for housing, food, transport and childcare falls entirely upon their shoulders, unlike dual-income married couples, said Heng.

“Between saving and feeding their child the next meal, of course they will take out the money to use it for the next meal,” she said. “It’s not that they don’t think saving is important. I think many of them feel that they just can’t afford to save right now.”

Nominated MP Terence Ho noted that children of single unwed parents may ultimately end up with less funding in their CDA for early education and development.

However, the adjunct associate professor at the Lee Kuan Yew School of Public Policy said that the disparity must be viewed alongside “the significant support given to all Singaporeans, regardless of parents’ marital status.”

More benefits for kids of unwed parents

In Lam’s parliamentary query on Sept 10, he had asked whether MSF assessed if the co-matching framework created greater challenges for single-income families and what additional support was under consideration.

MSF said the Government introduced the First Step Grant in 2016 as it recognises the difficulties faced by lower-income families. It deposits a sum upfront in all CDAs without requiring parents to contribute an initial amount.

In addition, new cash benefits under the SG Child Support Package announced at the National Day Rally will be extended to children of unmarried parents. This includes a $10,000 cash gift and $2,000 in Child Credits given in cash annually over 16 years.

This marked a significant shift as children born out of wedlock were previously excluded from some baby-related cash benefits, like the Baby Bonus Scheme.

MSF said with the new package, a larger proportion of support will be given via direct cash grants instead of co-matching. It added that lower-income families, regardless of marital status, are further supported through high means-tested subsidies for services such as education and healthcare.

To further close the gap, Ho suggested other forms of support such as higher CDA co-matching rates for lower-income families. Heng called for more financial literacy for single unwed parents so they can learn how to best manage their limited money.

The fundamental concern is that children are not disadvantaged due to their family backgrounds, said Heng.

“The focus needs to turn to the children, to ensure that our children have equal opportunities (and) access to what is essential for their development.”